Comments for aninvisiblehand.com

Comment on The “Pained” Consumer Price Index by Scott Hawes

Scott Hawes — Fri, 22 Jul 2011 20:49:59 +0000

Well said, would love to see the “Pain” CPI implemented and put to good use.
I would offer there is a fourth falsehood – metrics, the bastard son of statistics.

Comment on The “Pained” Consumer Price Index by Michael Goldstein

Michael Goldstein — Thu, 21 Jul 2011 13:10:59 +0000

Dr. Trester is right on target about the CPI missing the cost of keeping up with society. For example, the CPI measures the increase in the cost of the”same” car with the same features from year to year. But if all new cars come with airbags one year, the value of airbags are removed from the price as a technological improvement. But since new cars come with airbags, the cost of getting “a new car” went up by the full price increase, and so even the current CPI doesn’t capture the cost of “holding your place” in an ever-advancing society.

The chained CPI will just exacerbate this situation. If we want to cut benefits, let’s just do that and be honest about it.

Dr. Trester is brilliant in his idea for a “pain” CPI — now that’s something I would like to see.

Comment on Test Stressed by new things��

new things�� — Tue, 11 Jan 2011 02:59:35 +0000

With both support of this structure of solvency tests and with its shrill Pravda-style lecture about fiscal discipline, the Central Bank has signaled subordination to the political processes in Europe. It’s supposed to be not only independent of them, but above it all.These things creep up on you (like technology’ s impact on productivity during the mid-80’s through mid-aught’s). Biggest under-reported story of the year so far.

Comment on Test Stressed by Tim VH

Tim VH — Wed, 28 Jul 2010 17:45:44 +0000

Yes, indeed.

The biggest thing that happened last week was the European Central Bank taking its first step towards loss of credibility.

With both support of this structure of solvency tests and with its shrill Pravda-style lecture about fiscal discipline, the Central Bank has signaled subordination to the political processes in Europe. It’s supposed to be not only independent of them, but above it all.
These things creep up on you (like technology’s impact on productivity during the mid-80’s through mid-aught’s). Biggest under-reported story of the year so far.

Here’s a common-sense check: did the macro-economic scenarios of the tests include the ends of the continuum we’ve seen over just the past 5 years?
Nope, didn’t.
There was nothing like the slow mudslide of 3 to 5 years of -50bps to -75bps p.a. decline in aggregate price level accompanied with -25bps to -50bps negative annual NGDP.

Since we didn’t bother to model it, do we expect it be more manageable ( or more interesting) when we find out for real?

Comment on Europe Learns To Default The American Way, Restoring Transatlantic Balance Of Irresponsibility by Phil

Phil — Wed, 16 Jun 2010 14:58:44 +0000

Looks like Bill Gross read this piece as well:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJexCEJ8bGLg

Comment on Carbon Futures Price A Cheese Danish by virginia rockwell

virginia rockwell — Thu, 24 Dec 2009 11:35:38 +0000

let’s see that cheese danish bar graph! at $2.60-$2.70, the value of carbon credits is now somewhere between a bottle of water and a flaky pastry. it may be that a water sandwich would have been more healthy than the resulting not so healthy confection.

Comment on Taxpayers Saved from Morally Corrosive Profits As Citi Sells Phibro by Tim

Tim — Thu, 05 Nov 2009 19:30:07 +0000

If this is what happens with a major interest in a very large bank, can we imagine what will happen over time with the federal government’s RMBS-related holdings ~ esp Fannie, Freddie. Citi would be a great candidate for Mervyn King-style decomposition & spin-offs. While we wait for this….how’s your Japanese?